A $100 million 10-year bond that will strengthen Africa’s food security leading to the production of three million tonnes of food on the continent annually has been established by AFEX, a leading player in Nigeria’s commodities market.
AFEX said in a statement that the Food Security Fund (FSF) will support the financing of 250,000 hectares of land for commercial and smallholder farming, initially consisting of 30,000 hectares in the Nigerian states of Kano, Kaduna, Oyo, Ogun, Cross River and the Federal Capital Territory (FCT), before covering markets across East and West Africa.
According to AFEX, the focus of the fund will be to explore and optimise climate smart innovations and high yield agronomy protocols to ensure more food is produced and that land is used efficiently.
“As a blended finance structure, with an external fund manager, AFEX’s $100 million bond will boost food security in Nigeria, with additional impact across Ghana, Côte d’Ivoire, Kenya, Rwanda, Uganda and Tanzania,” the company explained.
On Nigeria’s capacity to store only four percent of annual grain production, AFEX said a significant portion of the funding will be allocated to constructing warehouses to address insufficient capacity utilisation of processing plants, increase in food import costs, and bridge the 300,000 metric tonne gap between demand and supply of seeds and a 10 million metric tonne gap in demand and supply of grains.
“The launch of The Food Security Fund is another really important milestone as we chart our journey building the physical and technology-enabled infrastructure for the continent’s commodity sector,” he said.